Automatic Weapons, Wine and Cannabis
In a recent post about how cannabis sales will hurt wine sales, one commenter noted that at least “there is no three-tier distribution system for weed.”
Well, there actually is a three-tier distribution system for cannabis in California, with some small exceptions for the smallest producers. Putting in place a three-tier distribution system (producer to distributor to dispensary) was the price to get law enforcement on board. This, of course, will eventually have to change otherwise the smallest cannabis farmers will be pushed out of business due to the requirements of selling at a lower price to distributors, along with having to expend significant resources on compliance.
There are other ways to see how the cannabis industry in California is very much like the wine industry beyond the three-tier system in place for cannabis cultivation and distribution. One indication is the very serious reporting that is happening by cannabis specific media.
One such source of industry information is Cannabis Business Times. CBT covers not only the developing California cannabis industry but the industry nationwide, and they are doing a very good job of leaning into the cannabis industry with important and well-researched articles. In its current issue, CBT has a very good and very detailed story on the state of the California recreational cannabis industry a few months in. “The Golden State Rules” describes a very similar divide in the CA cannabis industry based on the size of the growers. The well-heeled, corporate, venture capital-funded growers are winning in these early stages of legalization because they can afford to deal with the momentous regulations and compliance requirements, while the small growers are having such a hard time doing the same thing that many are simply not going legal yet.
It’s a familiar story to wine insofar as the divide is between large and small.
However, Cannabis Business Times does showcase one important difference between the wine industry and the cannabis industry. Look at this graphic over here on the right. That’s an ad for a security firm focused on providing all sorts of security services to the cannabis industry that is in the current issue of CBT. Look closely at its logo. I think I can safely say that at least the wine industry does not include service providers that feel a need to include pictures of automatic weapons in their advertising.
I admit, it kinda cracks me up.
In any case, the similarities between cannabis and wine are many. They begin with each product being a path to intoxication, being a source of huge amounts of tax revenue, and being farm-based, and continues with the heavy regulatory and compliance requirements and the divide between large and small players.
For those of us who have been in the alcohol industry for some time and who have tried to follow the business from a regulatory and legal standpoint, it is fascinating to see the state attempt to grapple with a new edition of Repeal.